Global Smart City Market – A $1.5 Trillion Market Opportunity by 2020

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Frost and Sullivan reveal a $1.5 trillion market potential in smart cities by 2020 with multiple opportunities to tap into in infrastructure development, technology integration, and energy and security services. The briefing will discuss the market opportunity, growth areas, and new business models in the smart city space and also provide insights into the competitive landscape highlighting the next game changers in the market.

The session will look into how utility providers, infrastructure companies, system integrators and telecom operators are actively pursuing this market adding more layers of intelligence as either integrators offering pre-packaged bundled solutions or as product vendors offering intelligent hardware and infrastructure. New funding mechanisms and public-private dynamics such as equity-based funding and performance based contracting will be also be touched upon.


This webinar will discuss in detail:
· Eight parameters that define a smart city
· The top 26 smart cities and future sustainable cities in the next decade
· Key smart city segments of 2025
· Smart city business models and funding mechanisms like OBM and BOO
· Key market participants and next game changers
· Implications of smart city solutions on key industries
· Recommendations for businesses and cities

Published in: Technology, Business

Global Smart City Market – A $1.5 Trillion Market Opportunity by 2020

  1. 1. Global Smart City Market A $1.5 Trillion Growth Opportunity in 2020
  2. 2. Today’s Presenters 2 Sarwant Singh Senior Partner Frost & Sullivan Archana Amarnath Program Manager Frost & Sullivan Karen Parrish VP of Industry Solutions, Public Sector IBM
  3. 3. Agenda Smart City Market - Key Smart City Segments Introduction and Definition 3 City Stakeholders Analysis – Key Market Participants and New Business Models Roles for Companies within the Smart City Ecosystem Macro to Micro Opportunities
  4. 4. 4 26 global smart cities by 2025 90 global sustainable cities by 2025 $1.5 trillion global market 2020 20% growth in smart energy sector to 2020 Key Findings of the Report Four Smart City Roles – integrator, network service provider, pure-play product vendor, and Managed service provider New Business Models– BOO, BOT, BOM, and OBM
  5. 5. 5 Smart Diamond that Defines a Smart City 4G Smart Energy Smart Building Smart Citizen Smart Technology Smart Healthcare Smart Mobility Smart Infrastructure* Smart Governance Source: Frost & Sullivan analysis.* Other Smart Infrastructure suchas security solutionssensor networks, digitalmanagement of water utilities not included in other segments
  6. 6. Key Parameters That Will Define a Smart City in 2020 • Smart Grids • Smart Meters • Intelligent Energy Storage • Building Automation • Intelligent Buildings: Advance d HVAC, Lighting Equipment • Low-emissionMobility • Integrated Mobility Solutions • Multimodal Transport • Sensor Networks • Digital Water and Waste Management • Use of ehealth and mhealth systems • Intelligent and connected medical devices • e-Government • e-Education • Disaster Management Solutions • Use of Green Mobility Options • Smart Lifestyle Choices • Energy conscious • Broadband penetration rate of over 80% • Location Based Services, Augmented Reality, GPS enabled devices/ phones Smart Energy: Digital Management of Energy Smart Buildings: Automated Intelligent Buildings Smart Mobility: Intelligent Mobility Smart Infrastructure: Digital Management of Infrastructure* Smart Governance: Government-on- the-Go Smart Healthcare: Intelligent Healthcare Technology Smart Citizen: Civic Digital Natives Smart Technology: Seamless Connectivity Source: Frost & Sullivan analysis.Note: *Infrastructure not included in other segments Smart Security: Safe Cities • Surveillance • Biometrics • Simulationmodelling and crime prediction • C2 and response
  7. 7. 20.93 % 14.11% 16.65%13.75% 9.09% 15.26% 10.21% Smart Infrastructure3 CAGR: 8.9% (2012-2020) Smart cities To Create Huge Business Opportunities With A Market Value Of $1.5 Trillion In 2020 1 2 4 5 6 Smart Governance and Smart Education2 CAGR: 12.4% (2012- 2020) Smart Energy CAGR: 19.6% (2012-2020) Smart Transportation CAGR: 14.8% (2012-2020) Smart Healthcare CAGR: 6.9% (2012-2020) Smart Building CAGR: 8.8% (2012-2020) 7 Smart City Market by Segments,1 Global, 2020 Source: Frost & Sullivan analysis. Note: The graph represent the market share of each segment in the smart city market. For more information on smart city market sectors please refer to appendix Smart City Market 2Smart Education includes eLearning services for schools, universities, enterprises, and government entities 1These numbers represent the entire smart solutions eco-system in each segment for both urban and non-urban panoramas Smart Security CAGR: 14% (2012-2020) 3 3Other Smart Infrastructure such as sensor networks, digital management of water utilities not included in other segments
  8. 8. 8 Selected Smart Cities in 2025 Global Smart Cities Over 26 Global Cities to be SMART Cities in 2025 - More than 50% of Smart cities of 2025 will be from Europe and North America Source: Forbes Smart City List, Innovation City Index, Specific Smart Project Websites for Each City, Frost & Sullivan Toronto San Francisco Vancouver Paris New York London Berlin Barcelona Amsterdam Seattle Tokyo Singapore Calgary Chicago Los Angeles Vienna Copenhagen Oslo Seoul Beijing Tianjin Wuhan Helsinki Sydney Shenzhen Stockholm Santander (upcoming)
  9. 9. 9 Global Snapshot of Sustainable/ Eco Cities in 2025 North America Latin America Europe Portland Sacramento Oakland San Diego Dallas Houston Orlando Austin Minneapolis San Jose Denver Boston Ottawa Montreal Philadelphia Washington DC Columbus Edmonton Brasília Belo Horizonte São Paulo Rio de Janeiro Curitiba Bogotá Mexico City Accra Johannesburg Cape Town Durban Tunis Masdar City Doha Middle East & Africa Asia-Pacific & Australia Note: Eco Cities are cities built on a green initiative, from buildings to transport, governance, city planning, energy, and technology. These cities are either upgraded or built from scratch Moreland Sustainable / eco-city in 2025 Sustainable / eco-city built from scratch Source: Siemens Green Index, Frost & Sullivan, 2012 Cardiff Brussels Zurich Lyon Frankfurt Milan Rome Cambridge shire Marseille Tampere Geneva Graz Riga Vilnius Metz Tubingen Montpellier Bordeaux Casablanca Norwich Hamburg Manchester Gothenburg Isle of Wight Glasgow Liverpool Dublin Marseille Bergen Edinburgh Nantes Gyor Istanbul Bursa Ankara Eskisehir Izmir Denizli Antalya Adana Edinburgh GIFT Sino-Singapore Tianjin Eco-city, Tianjin Nanjing Hong Kong Foshan Guangzhou Wuxi Osaka Yokohama Wanzhuang Eco-city, Hebei Medan Palembang Jakarta Surabaya Denpasar Makasar Balikpapan Adelaide Moreland
  10. 10. City Stakeholders Analysis , Business Models
  11. 11. 11 The city planner allows any qualified company or business organisation to build city infrastructure and provide city services. The city planner however will impose some regulatory obligations. The smart city planner appoints a trusted partner to develop the city infrastructure and services. The partner operates and manages the smart city services. The city planner has no role further. Most of the public- private partnerships are build on this model. The smart city planner appoints a trusted partner to build the city infrastructure and provide smart city services for a particular area within a time period. After completion the operation is handover to the smart city planner. The smart city planner independently builds the city infrastructure and delivers smart city services. The operation and maintenance of the services is fully under the planner’s control. Business Own Operate (BOO) Build Operate Transfer (BOT) Business Operate Managed (BOM) 1 2 34 Smart Cities Business Models Majority of smart city projects are developed under Business Operate Managed (BOM) business model Source: Frost & Sullivan analysis. Note: City Planner: Governing authorities involved with urban planning/land use planning that design plans for the development and management of urban and suburban areas based on land use compatibility, economic trends, environmental implications and social needs. Partner: Private / public stakeholders collaborating with city authorities over urban planning and smart city initiatives Build Own Operate (BOO) Build Operate Manage (BOM) Open Business Model (OBM)
  12. 12. Selective Wish List of Products/Services Portfolio That Can be Offered to a City 12Source: Frost & Sullivan Analysis Products/Services SECTORS Mobility Traffic management Electric vehicle charging infrastructure Tolling and congestion charging Integrated mobility management Geo Fencing & Asset Tracking Parking Management and Payment Solutions Energy Smart grids; energy management Smart meters Smart home appliances Flow and regenerative technologies Renewable integration Sensors and Smart Material IT and Telecom City Cloud Computing Data-centric Consulting Services Information Management Services IT Advisory Services Managed Security Services Authentication and Monitoring (Sensors, Video Surveillance) Security Identity Management Cyber Security Intelligent, real time security management Sensor actuator solutions Logistics / Mobility security management Building security Healthcare Integrated health record system E-health M-health Tele-consultation facility Home health Data and Business Analytics for Healthcare Governance e-Services Transactions and Payments e- Communication Notifications and alert service e-Administration Tools for public administration e-Security Law enforcement and emergency management e-Businesses Registration Services Patent Renewals M-Governance SMS Tax Returns SMS Utility Bills
  13. 13. There Are Four Different Roles Smart Cities Players Can Take 13 Pure-Play Product Vendors Managed Service Providers Network Service Providers Integrators Smart city integrators are project integrators that bring together various sectors of the smart city through pre-packaged platforms thereby providing a unified , holistic and end-to-end integration of multiple sectors Example: IBM, Oracle, Accenture, Siemens Smart city network providers offer collaborative networks, data analytics and enterprise working solutions that connect people, assets, systems and products by leveraging on their networking and M2M capabilities. Example: Cisco, Verizon, Ericsson, AT&T 1 2 3 4 Smart city product vendors provide “hard assets” like smart meters and distribution devices (e.g., automated switches, controllers for capacitor banks and voltage regulators) that operate as the main nodes of connectivity. Example: Eaton, Honeywell, ABB, Schneider Electric, Siemens Smart city managed service providers offer round-the-clock monitoring, complete management, compliance monitoring, and on-site consulting. These services are provided either in-house, co-managed, or are completely outsourced (third party providers) Example: IBM, Serco, SAIC, Infosys
  14. 14. Key Product / Service Provider Roles in Smart City Ecosystem 14 Products / Services Integrators Network Service Providers Pure-Play Product Vendors Managed Services Existing case examples Pre-packaged platforms Collaborative networks Hardware and Assets Maintenance Smart Clouds   Centralized Collaborative Dashboards    Data Integration  Unified Communications   Location Based Services and Transportation Platforms    Telepresence and virtual public services (education, healthcare)     Wireless Sensor Networks   Grid monitoring and control    Smart Buildings (materials and sensors)   Electric Charging Infrastructure   Asset tracking and management     Source: Frost & Sullivan analysis. Integrators, network service providers, product vendors, and managed service landscape in the smart city ecosystem Software Focused Communication Focused Infrastructure Focused Operations Focused
  15. 15. Convergence of Technology Will Lead to Convergence of Competition 15 Source: Frost & Sullivan IT Participants • IP networks • Digital technology • Analysis software • Technology integration • Network security Energy and Infrastructure Participants • T&D technology • Power electronics • Renewable energy • Integrated distribution management • Substation automation • AMI-enabled metering Automation and Building Control Participants • Building automation • Demand-side management • Device connectivity • Monitoring and sensing • Smart grid integration Telecom Participants • Broadband and Internet service providers • Phone lines • Mobile communications • Networked IT services SAP HP ST Electronics Oracle Google Microsoft Alcatel- Lucent IBM Cisco Senergy Eaton ALSTOM Grid Siemens AG General Electric ABB Honeywell Rockwell Automation Johnson Controls Schneider Electric Verizon O2 Deutsche Telekom Ericsson AT&T Serco Symantec Tyco Point of Convergence Securitas Security • Firewalls, Internet protocol security • Physical implementation of systems and monitoring • Managed and monitoring services • Cloud-based services • Identity management, smart cards
  16. 16. 16 Key Take Aways and Recommendations Recommendations to the Private Sector Recommendations to Cities Create Smart City Stakeholder Group Encourage Open Collaboration Build Digital Infrastructure – e.g., eServices (mHealth) Evaluate your role and position in the Smart City market Build City as a Customer Strategy - Create a specific team and steering group Identify potential partners, business models and consortiums Develop capabilities in data analytics and cloud-based services Develop services as a business model 1 2 3 1 2 3 4 5
  17. 17. How Can Frost & Sullivan Support You? 17 • Access to Research + 1 Day Strategic Workshop (to define opportunities and your role in the eco system • Custom Engagements to help develop your Value Proposition and deep-dive into opportunities • Access to a Short-list of city profiles and case studies of projects
  18. 18. No Research Topics 14 Connected Living: Macro to Micro Implications of Robotics and Artificial Intelligence on Consumer Applications 15 Mega Trends in UK 16 New Business Models 17 Industries of the Future 18 Big Data and its Implications on Industries 19 3D printing and its Macro to Micro Impact on Manufacturing and Supply Chain Management 20 Augmented Reality and its Applications 21 Future of Telecom 22 Mega Trends in Europe 23 Mega Trends in North America 24 Mega Trends in Middle East List of Studies done by Visionary Innovation Research Group 18 No Research Topics 1 Urbanisation and Mega Cities and Impact on Industries and Business 2 Global Mega Trends and its Implications to Urban Logistics to 2020 3 Worlds Top Mega Trends to 2020 and Impact on Society, Cultures, Business, and Personal Lives – 2012 Update 4 Bricks and Clicks: Impact of Connectivity on Future of Retailing 6 Strategic Opportunity Analysis of the Global Smart City Market 7 Mega Trends for Africa 8 Mega Trends for India 9 Mega Trends for LATAM 10 Mega Trends for Turkey 11 Mega Trends in China 12 E Retailing in the Automotive Industry 13 Future of Mobility—New Business Models, Opportunities, and Market Entrants in Mobility Integration
  19. 19. Contact Information Archana Amarnath Program Manager, Visionary Innovation Research Group (+44) 2079157893 aamarnath@frost.com 19 Sarwant Singh Partner & Practice Director, Visionary Innovation Research Group and Automotive & Transportation (+44) 2079157843 sarwant.singh@frost.com

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